FIRESIDE CHAT: Frank d’Amico (left) and Orlando Vogler warm themselves in New Dorp, SI, yesterday. The borough was hard hit by Hurricane Sandy, killing 19 people there and leaving thousands without power or heat. (AP)
Shocking Con Ed rate increases will follow Sandy’s massive cleanup, utility-industry analysts warn.
“Will storm costs be paid for by New York, New Jersey and Connecticut rate-payers? Yes,” Morningstar utility analyst Mark Barnett told The Post yesterday.
In a report last week, Barnett wrote, “Based on past storms and our initial conversations with management teams, we expect regulators will allow most of the affected utilities to defer and later recover from customers most of the storm costs, resulting in minimal cash losses.”
That’s because the formula that the state’s Public Service Commission uses to regulate utilities allows Con Ed to factor in Sandy’s costs when it asks to charge customers more.
“It happened after the World Trade Center — the utility can take [a proposed increase] up in its next rate case and see if it can get more money,” said Gerald Norlander, executive director of the Public Utilities Law Project.
Some of the costs incurred from Hurricane Sandy include the blown Manhattan transformer, which could run up to $100 million alone, according to Morningstar analysts. Another analyst agreed that when Con Ed looks at the financial toll of Sandy, it will expect to be made at least partially whole for its restoration efforts.
“All these [other electrical-company workers] helping out from out of state aren’t coming for free,” said Jonathan Arnold, a utilities analyst with Deutsche Bank Securities. “There is no basis for shareholders to pay . . . They would seek recovery [from customers] in a rate proceeding.”
Con Ed is supposed to submit its latest rate proposal to regulators this month.
“Our focus is completely on customer [power] restoration,” said spokesman Michael Clendenin. “How it will be paid for down the road is too early to say, but we will pursue every option to avoid impact to our customers, including federal assistance and insurance coverage.”
Con Ed and the Long Island Power Authority say they are still aiming for near total power restoration by the end of the week. But those forecasts are in doubt with the approach of a nor’easter today, with expected wind gusts of 45 mph. Westchester had 49,300 customers without power, an improvement of Monday’s, 60,000 customers, but still 14 percent of the county was off the grid.
Power restoration can come to a complete stop if winds and rains become too strong, the companies said. Customers can also expect to lose power.
There were 64,560 Con Ed customers, or 2 percent, still without lights in New York City yesterday, not counting another 33,000 Long Island Power Authority customers on the Rockaway Peninsula in the dark.
It was an improvement over the 16 percent of New Yorkers, again not counting the Rockaways, in the dark Monday.
There are 111,601 customers in Nassau County and another 83,198 in Suffolk without power, or 18 percent of Long Island — a slight improvement over the 21 percent without electricity Monday.